State leaders reach deal on remaining budget bills

SACRAMENTO

Published 4:00 am, Friday, June 22, 2012

Sacramento --

A health insurance program for low-income children will be eliminated and unemployed adults will lose welfare benefits after two years under a budget deal struck by Gov. Jerry Brown and Democratic leaders in the Legislature.

Lawmakers passed the main budget bill last week but had not yet agreed with the governor on some significant details, including cuts to welfare, college assistance grants and child care assistance. Those issues were resolved late Wednesday, and on Thursday the deal was made public.

Legislative leaders said they will vote on those final budget bills Tuesday.

"In each of these areas, we were able to find a middle ground with the governor that we believe minimizes the impact on people in need while at the same time assures significant ongoing savings for the state budget," said state Senate President Pro Tem Darrell Steinberg, D-Sacramento.

The process was unusual this year compared with past years as the Legislature passed the principal budget bill last week - ensuring that lawmakers could continue collecting their pay - but then negotiated many details afterward. Critics, including Republicans who were not included in the talks, blasted what they called a stunning lack of transparency in deciding how the state will spend billions of dollars.

Even with the announcement, leaders said they were not yet able to say specifically how much money would be saved by the new cuts, how much the state will spend in the budget overall or how much will be held in the reserve. Legislative leaders said general-fund spending would be close to the $92 billion with a reserve similar to the $544 million that was part of the main budget bill.

Aid for the poor

The negotiations and the final deal center on state aid for the poor.

Brown had called for lawmakers to cut nearly $900 million out of the state's welfare-to-work program by lowering grant levels and the amount of time adults could stay on the program. Under the compromise announced Thursday, Brown agreed to keep the grant levels as-is - around $465 a month for the average family - while lawmakers conceded to halve the time an unemployed person can receive aid, from four years to two.

People could stay on the program for four years if they are employed and meet stricter federal work requirements, however. The change applies only to new recipients, and counties also will have some flexibility to extend benefits in some cases.

Lawmakers also agreed to eliminate the state's Healthy Families Program, which provides health insurance for children, and move 880,000 poor youngsters into Medi-Cal. They backed off a plan to shift $250 million in property tax money from counties and redirect it to general state services.

The compromise plan also calls for an 8.7 percent cut to the funding for child care subsidies available to low-income families.

"This agreement strongly positions the state to withstand the economic challenges and uncertainties ahead," Brown said in a written statement. "We have restructured and downsized our prison system, moved government closer to the people, made billions in difficult cuts and now the Legislature is poised to make even more difficult cuts and permanently reform welfare."

Democratic legislators succeeded in persuading the governor not to slash hours and services provided by In-Home Supportive Services, which helps elderly, sick and disabled people stay in their homes and out of hospitals or nursing facilities. Brown had wanted to remove some services from home workers' purview, such as doing laundry, and cut hours by 7 percent; under the budget passed last week, Democratic lawmakers simply maintained a 3.6 percent cut in hours that has been in place since early 2011.

Cal Grants

Another focus of negotiations was on the Cal Grants program, which provides college aid. Public university students will be spared any change, but new students at private and for-profit colleges will see that aid slashed by thousands of dollars starting in the 2013-14 academic year. The state also will impose strict graduation-rate requirements in order for schools to be part of the program. Some advocates for children immediately criticized the decision to eliminate Healthy Families. They are concerned about care being disrupted for those children if they are forced to find a new provider. They are also worried that health care access will decline for Healthy Family recipients and the 3.6 million children already in Medi-Cal, said Michele Stillwell-Parvensky, a spokeswoman for the Children's Defense Fund.

But others welcomed the change, including the Western Center on Law and Poverty, which said it "will provide access to more health services, decrease spending on health care for low-income families, and help ensure that our kids are protected and get the health care they need."

Democratic lawmakers, who have argued they were holding out in order to protect the state's most vulnerable residents, said they are proud of the deal.

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The 2012-13 state budget plan

Thus far, the $92 billion plan that has been approved by the Legislature and is awaiting action by Gov. Jerry Brown includes a presumed approval of the governor's tax initiative in November and would:

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